Case Summary In the market for large aircraft demand or also known as Jumbo Jet Market the emerging

niche for very large aircraft (more than 400 passengers) saw only two competitors which are Boeing and Airbus. Even though both competitors moves were clearly marked by technology enhancements, and different target markets but both exhibited strategic interdependence. Came to the history of Airbus, it appeared to be one of the worlds leading aircraft manufacturers. It was formed in 1970 as a group of companies from France, England, Germany and Spain joined forces but it was not until over ten years later before Airbus started to make an impact on the market. The main reason for the existence of Airbus is the desire of several European governments to have a viable aerospace industry. Airbus also became a subsidiary of (European Aerospace and Defense Company) EADS in 2000. The EADS made Airbus as flexible as any multinational company, where it able to switch production to where it was most efficient, thereby enabling significant cost-savings. Airbus had developed a family of basic models for a wide variety of flight ranges and passenger capacity. Those models can be categorized into 3 types which are Single-aisle, wide-bodies and long-range models. In June 2000, Airbus announced the launch of the super jumbo A380. By this super jumbo A380, it would enable Airbus to enter the category of over 400-seat aircraft. In contrast, the Boeing Company is the competitor for Airbus, where it was founded in 1916 in Seattle, Washington. Boeing appeared to be the worlds largest aerospace company and second largest defense supplier, and combined the last two remaining commercial jet airplane manufacturers in the United States. Boeing also developed a family of basic models for a wide variety of flight ranges and passenger capacity. Boeing lost ground to Europes Airbus and lost its position as market leader in 2003. Due to the high competition from Airbus, Boeing had to make some improvements such as introduced new system to control the supply and stock of all of its parts in order to cut the inventory costs. Not only that, Boeing also made efforts to trim the number of special features it had to produce for different airlines such as halting the manufacture of its MD-11 and cutting back its workforce. Airbus managed to become the major competitor of Boeing with an airplane in each category except the 747 segment. Hence, now they are looking to challenge the Boeing 747s monopoly of over 400-seaters through few efficient strategies that they intend to come out with such as they really look into passenger comfort. The airlines provide the seats wider and provide each seat with its own separate armrest. Airbus also had been considering various interior design proposals

for the interior of the aircraft, such as a stylish lounge with a cocktail brand and a very modern seating. Airbus also had to face the challenge of lack of airport capacity and also maintaining the same level of convenience for the passenger by allow simultaneously loading on both the upper and lower decks, by having doublewide doors and doublewide stairs.

Problem Statement Primary Problem Primary problem is the major problem that occurred in the case and need a fast and efficient solution. The problem is listed below:How Airbus Industry competes with Boeing Company in terms of price and market share This can be classified as primary problem or major problem because from the case given, Airbus suspected that Boeing was able to use its monopoly profits on the 747 to keep down its prices for smaller aircraft, thereby snatching away Airbus sales in the other categories. Airbus had been content to attack the 747 from below, with bigger versions of its long-range A340. Airbus now is more focusing to challenge the Boeing 747s monopoly of over 400-seaters. The reason why they wanted to challenge Boeing Industry for the 747s model that could carry 400 passengers and could fly farther than any other commercial airliner is because 747s has been contributed $20 billion profits since their first flight launched and this has been significant profits to Boeing Industry.

Secondary Problem Secondary problem is also known as the second problem that found from the case study. Building the A380 to enter the super-jumbo market It was a good decision from Airbus Industry to come out with a new model aircraft of A380 to enter the super-jumbo jet market in order to compete with Boeing 747. Somehow, it is said to be the secondary problem due to the production of the Jumbo Jet. The duration of producing the aircraft takes quite a long period. Not only that, Airbus also has considered to offers in this double-deck aircraft (A380) various amenities such as casino, hairdresser, showers and health spa where it might affect the production cost to produce this new model.

Contingency Plan The marketing mix also known as the 4Ps Marketing is used to determine the target market and to guide development of the strategic marketing plan. The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. There are four categories which are product, price, place (distribution) and promotion. These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response. As for the contingency plan, we are focusing more on the price factor. This is because, if the plan of action been proposed was not achievable successfully, this contingency plan might be useful to the Airbus Industry. According to Kotler & Armstrong, 2010, price is the amount of money charged for a product or service, or the sum of all values that customers give in order to gain benefits of having or using a product or service. From the case, Airbus suspected that Boeing was able to use its monopoly profits on the 747 to keep down its prices for smaller aircraft, thereby snatching away Airbus sales in the other categories. Referring to the statement, this clearly describe that Airbus price was much higher than Boeing. Hence, the contingency plan here was to propose for Airbus to revise the current price that has been offered. Competitive pricing is the suitable method that can be used by Airbus Company. It is generally used when there's an established market price for a particular product or service. Competitive pricing is used most often within markets with commodity products, those that are difficult to differentiate from another. If there's a major market player, commonly referred to as the market leader,that company will often set the price that other, smaller companies within that same market will be compelled to follow. In order for Airbus to develop the competitive pricing effectively, Airbus need to know the prices of Boeing that has been established. Then figure out the optimum price and decide, based on direct comparison, whether Airbus can defend the prices that they have set.